What is the geographic scope of the 'National Account' definition for 360 Painting franchisees?

According to the 2025 360 Painting Franchise Disclosure Document, a 'National Account' is defined as a customer or prospective customer who owns, manages, or controls buildings or dwellings in more than one location, with at least one location outside any single franchisee's protected territory. Essentially, if a customer has multiple locations and at least one of those locations is not within a specific franchisee's protected territory, that customer can be designated as a National Account. 360 Painting retains the right to designate any customer as a National Account and negotiate agreements with them, even for locations within a franchisee's protected territory. Any disputes regarding whether a customer qualifies as a National Account will be determined by 360 Painting at their discretion.

This definition has significant implications for 360 Painting franchisees. While franchisees are granted a protected territory, this protection is not absolute when it comes to National Accounts. 360 Painting can directly negotiate and service these accounts, potentially competing with franchisees within their own territories. However, the FDD stipulates that if 360 Painting secures a contract with a National Account for services within a franchisee's territory, the franchisee in good standing will be offered the first option to perform those services under the same terms and conditions.

However, the franchisee must accept this offer within ten days of receiving notice. If the franchisee declines or fails to respond in time, 360 Painting reserves the right to either provide the services directly, through affiliates, or contract with another party, including other franchisees, to service the National Account within the original franchisee's territory. This clause ensures that National Accounts receive consistent service across multiple locations, but it also introduces a level of competition and potential loss of revenue for individual franchisees.

This system is fairly common in franchise systems, particularly those that deal with commercial clients. It allows the franchisor to pursue large, multi-location contracts, which can benefit the overall brand. However, it's crucial for prospective 360 Painting franchisees to understand the implications of the National Account provision and how it might affect their business within their protected territory. Franchisees should weigh the potential benefits of being offered National Account work against the risk of losing such accounts to 360 Painting or other franchisees.